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12:35 PM 22nd June 2020

UK Construction Counts The Productivity Cost Of Covid-19

The impact of COVID-19 is causing productivity losses of around 35 per cent on the UK’s construction sites, triggering extensive programme delays and spiralling costs that exacerbate the sector’s underlying performance problems.

According to new productivity research developed by leading global professional services company Turner & Townsend, the uncertainty of whether labour will arrive on site, social distancing measures and material delays are compounding the productivity gap.

Using data from 70 medium-sized UK construction projects, the company’s Suiko consultancy has modelled that a £20m commercial real estate project with an 81-week programme before the pandemic would typically suffer productivity losses of 20 per cent.

Now, a project of this scale is seeing this rise to 35 per cent productivity losses with project completion delays of up to 32 weeks and increases of around £600,000 in preliminary costs alone.

Analysis of 45 projects delivered during the pandemic reveals that labour shortages together with the impact of social distancing is accounting for around 7 per cent of productivity losses. A further 1 per cent is being lost through the poor transfer of design information while remote working. In addition, late material deliveries or unavailability is leading to another 7 per cent loss.

The sector’s reliance on the flow of global material supply chains continues to cause disruption, and although some shortages have been addressed, pinch points in the domestic supply chain are also continuing to impact productivity with delays being reported in the arrival of plasterboard and aggregates.

Stephen Gallagher, Principal Consultant at Turner & Townsend said that poor planning and inefficiency was a major contributor to the problem: “UK Construction has systemic productivity challenges. In particular, the final phases of a project are typically the most inefficient as contractors are often behind schedule and must throw extra labour at sites to try and get buildings finished on time. This usual fix will not be possible with social distancing and reduced labour.

“In the age of COVID-19 the internal fit-out phase is the most challenging because numerous trades are working on site (often out of sequence), and there is a high volume of and variety of materials arriving to site.”

Against this backdrop Turner & Townsend is warning of the wider economic risks of a faltering construction sector which remains one of the primary engines of UK growth. It is recommending that the construction industry mitigates the impact of COVID-19 by embracing digital platforms, offsite construction methods and adopting the ‘Lean’ approaches used by the manufacturing sector to boost performance.

Mr Gallagher continues: “Boosting construction’s productivity is key to supporting the UK’s wider economic recovery. With low productivity and low margins, the construction sector has poor resilience to weather the immediate and long-term consequences of COVID-19 on the economy.

“Short-term, the sector needs to look at whether it can recover lost productivity on-site through smarter working practices. Lean can help increase productivity whilst dealing with lower resource levels, by removing large amounts of process “waste”. Planned versus actual progress can be demonstrated in three dimensions using photo-realistic representations of activity on site and validated using the contractors’ 4D schedule in order to increase efficiency. By embracing modern methods of construction, the COVID-19 impact on resource levels can be mitigated by taking processes off site.

These solutions have been present for some time, but their adoption is now urgent. We need to see a complete mindset shift to close the productivity gap.”